BRI – CHINESE IMPERIALISM, OR GERMAN PROTECTIONISM?

TIM VAN GARDINGEN

NOVEMBER 2017

The Silk Roads are returning. China’s largest and most ambitious international economic plan, the “One Belt One Road Initiative” (yidaiyilu), will see its influence tangibly spread over Asia, Africa and Europe. With newly planned trade corridors over much of the world, a vast number of countries will be affected by the initiative. Included in that number is Germany. The question arises: How will “One Belt One Road” impact on the country?

The “One Belt One Road” initiative has not appeared overnight. Xi Jinping first announced his masterwork in September 2013 and has developed it since then into an extremely ambitious vision. The Chinese leader pictures a better-connected world, held together by free trade and global cooperation. The proposed maritime ‘road’ would meander from Southeast Asia to Africa, where China has already been carrying out major infrastructure projects for a number of years. The ‘belt’ stretches across Central Asia and all the way to Western Europe.

“Inclusiveness” (baorongxing) is the central word to Xi’s rhetoric for the project. For many outside of China, this standpoint seems uncharacteristic of a country renowned for its history of closed borders and secrecy, but China has been gradually liberalising business since the start of its economic reforms in the late 70s. China is now not only more open economically, but also confident in its business know-how. The “One Belt One Road” initiative signals China’s desire – and capability - to join the major players of the world economy.

A number of German media outlets are already expressing their fears over the new silk roads. Wary critics point to China’s track record for promoting their own form of ‘illiberal free trade’ which is at ends with the Western model of international trade, and expect its development to be damaging to German companies. The proximity of Putin to the Chinese leadership and his willingness to be part of the project scares the German media further. This altogether raises concern towards China’s apparent desire to make economic in-roads into the Eurasian region on their own conditions. Such behaviour is generally known as making trade agreements, and both Europe and America are quite used to doing it themselves.

Any bilateral agreement does of course have political implications, but Germany’s fear of working with China on predominantly Chinese terms is telling of previous agreements where Europe has been the instigator of negotiations. More justified would be a view of caution towards the kind of company, rather than Chinese FDI in general. Up to now, mainly only state-owned companies have been involved in the initiative. That could potentially lead to the Chinese Politburo assuming more political influence over international trade, usurping Chinese private companies.

Some German companies are, however, openly enthusiastic, with eyes fixed solidly on new business opportunities. Duisburger Hafen in Nordrhein-Westfalen already considers itself a central point for trade relations not just between China and Germany, but also China and Europe. In October 2016, the port claimed in an announcement regarding expanding its China business that “when you are in Duisburg, you are in Europe”. Duisport already cooperates with Urumqi, China’s Far Western trade powerhouse; a city central to the new Silk Road’s expansion due to its strong position in Central Asia.

Some Chinese groups are meanwhile not entirely satisfied with current Sino-German trade relations. The China International Investment Promotion Agency accused Germany of protectionism directed at China following changes in Germany’s regulation of foreign trade. Yet, as both countries are members of the WTO, it seems unlikely that Germany is actually able to target China unilaterally with trade restrictions. It is, however, noteworthy that Germany is the one being criticised for poor international trade practice. The standpoint also parrots Xi Jinping’s ‘inclusiveness’ rhetoric.

Germany does not appreciate the very general sounding rhetoric China prefers to use when it talks about official plans. Just like the extremely vague (and clearly related) Chinese Dream (zhongguomeng) back home in China, there is no exact, set in stone plan for the new Silk Roads. Instead, China offers a lofty dream with networks of possible trade corridors on maps with a mysterious lack of national borders. Daniel Müller from the Ostasiatischen Verein believes that the new Silk Road is more of a conglomerate of many individual initiatives rather than one unified grand plan. From the Chinese perspective, this pragmatic approach is perfectly normal; indeed, it is part of modern Chinese culture. For Germany however, the uncertainty raises concern further.

Much of the misunderstanding between Germany and China stems from differences in political and business culture. Germany favours clear, objectively measurable plans. China, on the other hand, prefers big ideas resolved with pragmatism. Deng Xiaoping’s infamous pragmatism brushed off on the nation, and has remained the culture ever since. As the new Silk Roads progresses, what Germany is likely to find even more challenging than China’s apparent lack of clear planning is the country’s special brand of pragmatism coupled with force.

But German critics’ fears of the “One Belt One Road” Initiative are focussed on the wrong concerns. The massive infrastructure project will not necessarily be bad for Germany and its businesses, but will change political and economic relations in ways which are as of yet hard to predict. What is certain: the “One Belt One Road” initiative will change both Sino-German and global relations massively.